STOCKHOLDERS' AGREEMENT
Stockholders' Agreement, dated October 10, 1996, by and among
TCI Xxxxxx Preferred, Inc., a Colorado corporation ("TCITP"), Liberty
Broadcasting, Inc. ("LBI") and Communication Capital Corp. ("CCC" and, together
with LBI and TCITP, the "TCITP Stockholders"), R.E. Xxxxxx, III ("Xxxxxx"),
Xxxxxx Outdoor, Inc. ("TOI") and Xxxxxx Partners, L.P., a Georgia limited
partnership ("TP" and, together with Xxxxxx, the "Turner Stockholders"), and TW
Inc., a Delaware corporation, which promptly following the date hereof will
change its name to Time Warner Inc. ("Holdco").
Each of the TCITP Stockholders and the Turner Stockholders is
or may become a beneficial owner of shares of capital stock of Holdco. The
Xxxxxx Stockholders, Holdco and the TCITP Stockholders desire to enter into the
arrangements set forth in this Agreement regarding future dispositions of shares
of Holdco capital stock which the Xxxxxx Stockholders or the TCITP Stockholders
now or may in the future beneficially own.
Therefore, in consideration of the premises and the mutual
benefits to be derived hereunder and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions: The following terms in this Agreement shall have the
respective meanings listed below:
Affiliate: With respect to any Person, any other Person which
directly or indirectly Controls, is under common Control with or is Controlled
by such first Person. The term "affiliated" (whether or not capitalized) shall
have a correlative meaning. For purposes of this Agreement (i) the Xxxxxx
Foundation, Inc. (the "Xxxxxx Foundation"), the R.E. Xxxxxx Charitable Remainder
Unitrust No. 2 (the "Xxxxxx Unitrust") and any other Charitable Transferee or
Qualified Trust
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shall be deemed not to be Affiliates of any Xxxxxx Stockholder and (ii)(A) no
TCITP Affiliate shall be deemed to be an Affiliate of any Xxxxxx Affiliate, or
vice versa, and (B) no TCITP Affiliate or Xxxxxx Affiliate shall be deemed to be
an Affiliate of any Holdco Affiliate, or vice versa.
Affiliated Group: With respect to any Stockholder, the group
consisting of such Stockholder and all Controlled Affiliates of such
Stockholder.
Agreement: This Agreement as the same may be amended from time
to time in accordance with its terms.
Appraised Value: As defined in Section 4.1 hereof.
The "beneficial owner" of any security means a direct or
indirect beneficial owner of such security within the meaning of Rule 13d-3
under the Exchange Act, as in effect on and as interpreted by the Commission
through the date of this Agreement, and the terms (whether or not capitalized)
"beneficially own," "beneficially owned" and "owned beneficially" shall have
correlative meanings; provided, however, that any Person who at any time
beneficially owns any Option or Convertible Security shall also be deemed to
beneficially own the Underlying Securities, whether or not such Option or
Convertible Security then is or within 60 days will be exercisable, exchangeable
or convertible.
Board of Directors: The Board of Directors of Holdco.
Bona Fide Offer: As defined in Section 3.1 hereof.
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Broker Transactions: "Broker's transactions" within the
meaning of paragraph (g) of Rule 144 of the General Rules and Regulations under
the Securities Act.
Charitable Transfer: Any Disposition of Covered Securities by
a Xxxxxx Stockholder to the Xxxxxx Foundation, any other Charitable Transferee,
the Xxxxxx Unitrust or any other Qualified Trust that is not an Exempt Transfer
pursuant to clause (vii) of the definition of Exempt Transfer; provided,
however, that any such transferee shall, by a written instrument in form and
substance reasonably satisfactory to TCITP, agree to be bound by the provisions
of this Agreement with respect to the Covered Securities that are the subject of
such Charitable Transfer to the same extent as the Xxxxxx Stockholder making
such Disposition.
Charitable Transferee: Any charitable organization described
in Section 501(c)(3) of the Code.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act or the
Exchange Act.
Common Stock: The common stock, par value $.01 per share, of
Holdco or any other shares of capital stock of Holdco into which the Common
Stock may be reclassified or changed.
Contract: Any agreement, contract, commitment, indenture,
lease, license, instrument, note, bond or security.
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Control: As to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person (whether through ownership of securities, partnership
interests or other ownership interests, by contract, or otherwise). The terms
"Controlled," "Controlling" and similar variations shall have correlative
meanings.
Controlled Affiliate: When used with respect to a specified
Person, means each Affiliate of such Person which is Controlled by such Person
and which is not Controlled by or under common Control with any other Person
(except one or more other Controlled Affiliates of such specified Person);
provided, however, that for purposes of any provision of this Agreement which
requires any Stockholder to cause one or more of its Controlled Affiliates to
take or refrain from taking any action (including any action relating to the
Disposition of any Covered Securities) or which otherwise purports to be
applicable to any Covered Securities owned or held by one or more Controlled
Affiliates of such Stockholder, no Affiliate of such Stockholder which otherwise
would be a Controlled Affiliate of such Stockholder shall be deemed to be a
Controlled Affiliate of such Stockholder unless such Stockholder possesses,
directly or indirectly, the power to direct decisions regarding such action or
the Disposition of such Covered Securities.
Convertible Securities: Evidences of indebtedness, shares of
stock or other securities or obligations which are convertible into or
exchangeable, with or without payment of additional consideration in cash or
property, for any Holdco Shares, either immediately or upon the occurrence of a
specified date or a specified event, the satisfaction of or failure to satisfy
any condition or the happening or failure to happen of any other contingency.
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Covered Securities: Any and all Holdco Shares, Convertible
Securities and Options.
Current Market Price: As to any share of Common Stock at any
date, the average of the daily closing prices for shares of the Common Stock for
the 5 consecutive trading days ending on the trading day immediately before the
day in question. The closing price for such shares for each day shall be the
last reported sale price or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices, in either case on
the principal United States securities exchange on which such shares are listed
or admitted to trading, or if they are not listed or admitted to trading on any
such exchange, the last reported sale price (or the average of the quoted
closing bid and asked prices if no sale is reported) as reported on the Nasdaq
Stock Market, or any comparable system, or if such shares are not quoted on the
Nasdaq Stock Market, or any comparable system, the average of the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected by Holdco.
Defensive Provision: (i) any control share acquisition,
interested stockholder, business combination or other similar antitakeover
statute (including the Delaware Statute) applicable to Holdco, (ii) any
provision of the Restated Certificate of Incorporation or Bylaws of Holdco
(including Article V of such Restated Certificate of Incorporation), and (iii)
any plan or agreement to which Holdco is a party, whether now or hereafter
existing, which would constitute a "poison pill" or similar antitakeover device
(including any Rights Plan).
Delaware Statute: Section 203 of the Delaware General
Corporation Law or any successor statutory provision.
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Disadvantageous Result: (i) The breach or violation of any
Restriction applicable to any member of the Group of such Stockholder or its
Affiliates, (ii) any member of the Group of such Stockholder or its Affiliates
becoming subject to any Restriction to which it was not previously subject, or
(iii) the occurrence of any Rights Plan Triggering Event.
Disposition: When used with respect to any Covered Security,
any sale, assignment, alienation, gift, exchange, conveyance, transfer,
hypothecation or other disposition whatsoever, whether voluntary or involuntary
and whether direct or indirect, of such Covered Security or of dispositive
control over such Covered Security. "Disposition" shall not include (i) a
transfer of voting control of a Covered Security to the extent required to avoid
imposition of any prohibition, restriction, limitation or condition on or
requirement under any Requirement of Law or Defensive Provision having any of
the effects described in clauses (A) and (B) of the definition of Restriction
herein, or (ii) delivery of a revocable proxy in the ordinary course of
business. The term "dispose" (whether or not capitalized) shall mean to make a
Disposition. Without limiting the generality of the foregoing:
(i) any redemption, purchase or other acquisition in any manner
(whether or not for any consideration) by Holdco of any Covered
Securities shall be deemed to be a Disposition of such Covered
Securities; and
(ii) none of the conversion or exchange of a Convertible
Security, the exercise of any Option or the failure to convert or
exchange a Convertible Security or to exercise any Option prior to the
expiration of the right of conversion, exchange or exercise shall be
deemed to be a Disposition of such Convertible Security or such Option.
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For purposes of this Agreement any Disposition of any Option or Convertible
Security shall also constitute a Disposition of the Underlying Securities.
Effective Time: "Effective Time of the Merger", as
defined in the Merger Agreement.
Encumbrance: As defined in Section 3.1(f) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended,
or any successor Federal statute, and the rules and regulations of the
Commission promulgated thereunder, as from time to time in effect.
Exempt Transfer: Any Disposition that falls within any one of
the following clauses: (i) An exchange or conversion of Covered Securities which
occurs by operation of law in connection with a merger, consolidation of Holdco
with or into another corporation, or a recapitalization, reclassification or
similar event that has been duly authorized and approved by the required vote of
the Board of Directors and the stockholders of Holdco pursuant to the Restated
Certificate of Incorporation of Holdco and the law of the jurisdiction of
incorporation of Holdco; (ii) any surrender by a Stockholder to Holdco of
Covered Securities upon redemption by Holdco of such Covered Securities pursuant
to any right or obligation under the express terms of such Covered Securities
that is made on a proportionate basis from all holders of such Covered
Securities and is not at the option of such Stockholder; (iii) any Permitted
Pledge and any transfer of such pledged Covered Securities to the Pledgee upon
default of the obligations secured by such pledge; (iv) any transfer solely from
one member of the Affiliated Group of a Stockholder to another member of the
Affiliated Group of a Stockholder; (v) any transfer by a Stockholder who is an
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individual to (A) a spouse, (B) any other member of his immediate family (i.e.,
parents, children, including those adopted before the age of 18, grandchildren,
brothers, sisters, and the spouses or children of the foregoing), (C) Qualified
Trust or (D) a custodian under the Uniform Gifts to Minors Act or similar
fiduciary for the exclusive benefit of his children during their lives; (vi)
subject to Section 4, any transfer to the legal representatives of a Stockholder
who is an individual upon his death or adjudication of incompetency or by any
such legal representatives to any Person to whom such Stockholder could have
transferred such Covered Securities pursuant to any clause of this definition;
(vii) a transfer by the Xxxxxx Stockholders of up to an aggregate of 12 million
shares (less the product of (A) the number of shares of Class A Common Stock and
Class B Common Stock of TBS that are the subject of a Disposition (as such term
is defined in the TBS Shareholders' Agreement) effected by Xxxxxx that is
contemplated by Section 3(a) of the TBS Shareholders' Agreement after September
22, 1995, and (B) the Common Conversion Number (as defined in the Merger
Agreement)) of Common Stock (appropriately adjusted to take into account any
stock split, reverse stock split, reclassification, recapitalization,
conversion, reorganization, merger or other change in such Common Stock) to any
Charitable Transferee if, in the written opinion of legal counsel reasonably
acceptable to TCITP, requiring such Charitable Transferee to become a party to
this Agreement would limit by a material amount the amount of the deduction for
federal income tax purposes that would be available to the applicable Xxxxxx
Stockholder in the absence of such requirement, and any subsequent transfer by
any such Charitable Transferee of any such shares; (viii) any exchange,
conversion or transfer of Covered Securities pursuant to Section 4.1 of the LMC
Agreement; and (ix) any sale or transfer permitted by and made in accordance
with Section 3 or 4 hereof; provided, however, that no Disposition pursuant to
clause (iii), (iv), (v) or (vi) shall be
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an Exempt Transfer, unless each Person to whom any such Disposition is made,
unless already a party to this Agreement and bound by such provisions or a
Controlled Affiliate of a party to this Agreement who is bound by such
provisions, shall by a written instrument become a party to this Agreement bound
by all of the provisions hereof applicable to the Stockholder making such
Disposition.
Exercise Notice: Either an Other Stockholder Exercise
Notice or a Holdco Exercise Notice, as the context requires.
Fast-Track Offer Notice: As defined in Section 3.3(a)
hereof.
Fast-Track Sale: Any sale of shares of Common Stock for the
account of any Stockholder which meets all of the following requirements as of
the date a Fast-Track Offer Notice is given with respect thereto pursuant to
Section 3.3:
(i) such Stockholder has a bona fide intention to sell such
shares of Common Stock within a period of 115 days after such date and
such sale is not being undertaken as a result of any offer to buy, bid
or request, invitation or solicitation to sell made by any Person
(other than any such offer, bid, request, invitation or solicitation
from a registered broker-dealer or investment banker not intended to
circumvent the provisions of Section 3.1);
(ii) the Common Stock is registered under Section 12(b) or 12(g)
of the Exchange Act and is listed for trading on a national securities
exchange registered under the Exchange Act or traded in the
over-the-counter market and quoted in an automated quotation system of
the National Association of Securities Dealers, Inc.;
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(iii) such sale is to be effected through Broker Transactions
or pursuant to a registration statement covering such shares in effect
at the date of the Fast-Track Offer Notice; and
(iv) the following sum does not exceed $100 million:
(A) the aggregate Current Market Price of the shares
of Common Stock to be sold (determined as of the date
a Fast-Track Offer Notice with respect thereto is
given pursuant to Section 3.3), plus
(B) the aggregate sale price of all shares of Common
Stock sold pursuant to Section 3.3 by any member or
former member of the same Group as such Stockholder
during the 90 days immediately preceding the date of
such Fast Track Offer Notice, plus
(C) without duplication, the aggregate Current Market
Price, determined as of the date specified in
subclause (A) of this clause (iv), of all shares of
Common Stock as to which any Fast-Track Offer Notice
is given by any other Stockholder who is a member of
the same Group as such Stockholder within two
business days before or two business days after such
date.
Fast-Track Shares: As defined in Section 3.3(a) hereof.
Free to Sell Date: As defined in Section 3.1(j) hereof.
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FTC: The Federal Trade Commission.
FTC Consent Decree: The Agreement Containing Consent Order
(the "ACCO") dated as of August 14, 1996, as amended on September 4, 1996 among
Old TW, TCI, TBS, LMC and the FTC which contemplates the issuance of an Order,
together with such Order and the Interim Agreement attached as Exhibit I to the
ACCO, in each case as the same may be amended from time to time hereafter.
Governmental Authority: Any nation or government, any state or
other political subdivision thereof and any court, commission, agency or other
body exercising executive, legislative, judicial or regulatory functions.
Group: Either the TCITP Stockholders considered collectively
as a group or the Xxxxxx Stockholders considered collectively as a group, as the
context requires.
Holdco: As defined in the opening paragraphs of this
Agreement.
Holdco Affiliates: Holdco and Affiliates of Holdco.
Holdco Elected Shares: In the case of any Offer Notice, any
Subject Shares covered thereby as to which Holdco exercises its right of
purchase pursuant to Section 3.1(e).
Holdco Exercise Notice: As defined in Section 3.1(e).
Holdco Shares: Any and all shares of capital stock of Holdco
of any class or series, whether now or hereafter authorized or existing.
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Holdco Stockholders Agreement: Any stockholders' agreement
between Holdco and any one or more of the Xxxxxx Stockholders in effect on the
date hereof.
Initial Trigger: As of a given time, for either Stockholder,
with respect to the Subject Shares covered by any Offer Notice or Tender Notice,
the greatest number of such Subject Shares as may then be acquired by such
Stockholder (or its Affiliates) without causing a Disadvantageous Result.
Involuntary Event: As defined in Section 4.1 hereof.
Judgment: Any order, judgment, writ, decree, award or other
determination, decision or ruling of any court, judge, justice or magistrate,
any other Governmental Authority or any arbitrator.
LMC Agreement: The Second Amended and Restated LMC Agreement
dated as of September 22, 1995, among Old TW, Holdco, LMC Parent and certain
subsidiaries of LMC Parent.
LMC Parent: Liberty Media Corporation, a Delaware
corporation.
Merger Agreement: The Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, among Old TW, Holdco, TW Acquisition
Corp., a Georgia corporation, Time Warner Acquisition Corp., a Delaware
corporation, and TBS, as amended by Amendment No. 1 thereto dated as of August
8, 1996.
Offer Notice: As defined in Section 3.1(a) hereof.
Old TW: The Delaware corporation known on September 22, 1995
as Time Warner Inc.
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Xxx XX Xxxxxx Xxxx: The Rights Agreement dated as of January
20, 1994, between Old TW and Chemical Bank, as Rights Agent.
Options: Any options, warrants or other rights (except
Convertible Securities), however denominated, to subscribe for, purchase or
otherwise acquire any Holdco Shares or Convertible Securities, with or without
payment of additional consideration in cash or property, either immediately or
upon the occurrence of a specified date or a specified event or the satisfaction
or failure to satisfy any condition or the happening or failure to happen of any
other contingency.
Other Stockholder: With respect to a Xxxxxx Stockholder, the
"Other Stockholder" shall be TCITP, and with respect to a TCITP Stockholder, the
"Other Stockholder" shall be Xxxxxx.
Other Stockholder Elected Shares: As defined in Section 3.1(e)
hereof.
Other Stockholder Exercise Notice: As defined in Section
3.1(e) hereof.
Other Stockholder Group: With respect to any Other
Stockholder, the Group of which such Other Stockholder is a member.
Permitted Pledge: A bona fide pledge of Covered Securities by
a Stockholder to a financial institution to secure borrowings permitted by
applicable law; provided that such financial institution agrees in writing to be
bound by the provisions of Sections 2, 3 and 4 of this Agreement to the same
extent and with the same effect as such Stockholder and the
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borrowings so secured are with full recourse against other assets of such
Stockholder or other collateral.
Per-Share Offer Consideration: As defined in Section 3.1(a)
hereof.
Person: Any individual, corporation, limited liability
company, general or limited partnership, joint venture, association, joint stock
company, trust, unincorporated business or organization, governmental authority
or other legal entity or legal person, whether acting in an individual,
fiduciary or other capacity. The term "Person" also includes any group of two or
more Persons formed for any purpose.
Prospective Purchaser: As defined in Section 3.1 hereof.
Public Sale: Any sale to the public for the account of any
Stockholder, (i) in Broker Transactions, (ii) otherwise pursuant to Rule 144 or
(iii) through a registered offering pursuant to an effective registration
statement under the Securities Act which in any case meets both of the following
requirements (to the extent applicable) as of the date an Offer Notice is given:
(A) such Stockholder has a bona fide intention to sell such
shares of Common Stock as promptly as practicable after all applicable
requirements of the Securities Act are satisfied, and such sale is not
being undertaken as a result of any offer to buy, bid or request,
invitation or solicitation to sell made by any Person (other than any
such offer, bid, request, invitation or solicitation from a registered
broker-dealer or investment banker not intended to circumvent the
provisions of Section 3.1); and
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(B) in the case of a registered offering, such shares either
have been registered under the Securities Act or such Stockholder has
the immediate right to require Holdco to register such shares under the
Securities Act.
Purchase Price: As defined in Section 3.1(a) hereof.
Purchase Right: As defined in Section 3.1(c) hereof.
Purchased Shares: When used with reference to a Purchaser
which is the Other Stockholder, the Other Stockholder Elected Shares, and when
used with respect to a Purchaser which is a Holdco Affiliate, the Holdco Elected
Shares.
Purchaser: The term "Purchaser" means TCITP, in the case of
any purchase of TCITP Elected Shares pursuant to any Other Stockholder Exercise
Notice, Xxxxxx, in the case of any purchase of Xxxxxx Elected Shares pursuant to
any Other Stockholder Exercise Notice, and Holdco, in the case of any purchase
of Holdco Elected Shares pursuant to any Holdco Exercise Notice.
Qualified Trust: Any trust described in Section 664 of the
Code of which a Stockholder, members of his family or a Charitable Transferee
(and no other persons) are income beneficiaries.
Related Party: As to any Person, any Affiliate of such Person
and, if such Person is a natural person, such Person's parents, children,
siblings and spouse, the parents and siblings of such Person's spouse and the
spouses of such Person's children who become parties to this Agreement.
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Requirement of Law: With respect to any Person, all federal,
state and local laws, rules, regulations, Judgments, injunctions and orders of a
court or other Governmental Authority or an arbitrator, applicable to or binding
upon such Person, any of its property or any business conducted by it or to
which such Person, any of its assets or any business conducted by it is subject.
Restriction: Any prohibition, restriction, limitation or
condition on or requirement under any Defensive Provision or Requirement of Law,
including the FTC Consent Decree, (A) that (i) limits the ability of any
Stockholder to acquire additional Holdco Shares or hold or dispose of any Holdco
Shares or to participate in any material right or benefit otherwise available or
to be distributed to security holders of the same class as the Holdco Shares,
generally, or requires such Stockholder to Dispose of any Holdco Shares, (ii)
reduces or otherwise limits the ability to exercise the voting or other rights
of all or a portion of the Holdco Shares beneficially owned by such Stockholder
below that applicable to Holdco Shares generally, or (iii) limits the ability of
any Stockholder to consummate any merger, consolidation, business combination or
other transaction with, Holdco or any of its subsidiaries or other Affiliates or
substantially increases the cost of consummation or (B) under which the
acquisition or ownership of additional Holdco Shares (i) would result in a
material violation of applicable law, (ii) would require the discontinuance of
any material business or activity or the divestiture of any material portion of
any business or property, or (iii) would make the continuation of any such
business or activity or the ownership of such property illegal or subject to
material damages or penalties.
Rights: The rights issued to the holders of record of
the Common Stock pursuant to any Rights Plan, having the rights
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and privileges, and subject to the terms and conditions, set forth in such
Rights Plan, and any other security or right which may be issued or granted in
exchange or substitution therefor or in replacement or upon exercise thereof.
Rights Plan: Any stockholder rights plan or other form of
"poison pill" adopted by Holdco and in effect at any time during the term of
this Agreement, as amended or modified from time to time.
Rights Plan Trigger: As of a given time, for either
Stockholder, with respect to the Subject Shares covered by any Offer Notice or
Tender Notice, the greatest number of such Subject Shares as may then be
acquired by such Stockholder (or its Affiliates) without causing a Rights Plan
Triggering Event; provided, however, that if at such time there shall be no
Rights Plan in effect, the Rights Plan Trigger shall be equal to the total
number of Subject Shares covered by such Offer Notice or Tender Notice.
Rights Plan Triggering Event: Any event under any Rights Plan
analogous (in terms of its effects under such Rights Plan) to one of the
following events under the Old TW Rights Plan:
(i) any member of either Group becoming an "Acquiring
Person" within the meaning of the Old TW Rights Plan or
(ii) the Rights becoming transferable separately from
shares of the Common Stock;
in any such case, in the event of a dispute, as determined in
accordance with Section 3.1(d).
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Sale Agreement: As defined in Section 3.1(f) hereof.
Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder, as from time to time in effect.
Selling Stockholder: As defined in Section 3.1 hereof.
Stockholder: Any TCITP Stockholder or Xxxxxx Stockholder.
Subject Shares: As defined in Section 3.1 hereof.
TBS: Xxxxxx Broadcasting System, Inc.
TBS Shareholders' Agreement: The Shareholders' Agreement dated
as of June 3, 1987, among TBS, Xxxxxx and the Original Investors named therein.
TCITP: As defined in the opening paragraphs of this
Agreement.
TCITP Affiliates: TCITP and the Affiliates of TCITP.
TCITP Stockholders: TCITP and all Controlled Affiliates of
TCITP, in each case so long as such Person is or is required to be a party to
this Agreement or is the beneficial owner of any TCITP Holdco Shares.
TCITP Holdco Shares: Any and all Covered Securities of which
any TCITP Stockholder becomes the direct or indirect beneficial owner at the
Effective Time or thereafter.
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Tendering Stockholder: As defined in Section 3.4(a) hereof.
Tender Notice: As defined in Section 3.4(a) hereof.
Tender Shares: As defined in Section 3.4(a) hereof.
TOI: As defined in the opening paragraphs of this Agreement.
TP: As defined in the opening paragraphs of this Agreement.
Xxxxxx: As defined in the opening paragraphs of this
Agreement.
Xxxxxx Affiliates: The Xxxxxx Stockholders and the
Affiliates of the Xxxxxx Stockholders.
Xxxxxx Stockholders: Xxxxxx and all Affiliates of Xxxxxx, in
each case so long as such Person is the beneficial owner of any Covered
Securities, the Xxxxxx Foundation, the Xxxxxx Unitrust or any other Charitable
Transferee if such entity is required to become a party to this Agreement as a
result of a Charitable Transfer (provided, however, that any such entity shall
be deemed a Xxxxxx Stockholder only with respect to Xxxxxx Holdco Shares
acquired by such entity in a Charitable Transfer) and any Xxxxxx Related Party
who is required to become a party to this Agreement pursuant to the terms
hereof.
Xxxxxx Holdco Shares: Any and all Covered Securities of which
any Xxxxxx Stockholder becomes the direct or indirect beneficial owner at the
Effective Time or thereafter; provided, however, that Covered Securities
beneficially owned by the Xxxxxx
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Foundation or the Xxxxxx Unitrust immediately after the Effective Time shall not
be Xxxxxx Holdco Shares.
Underlying Securities: When used with reference to any Option
or Convertible Security as of any time, the Covered Securities issuable or
deliverable upon exercise, exchange or conversion of such Option or Convertible
Security (whether or not such Option or Convertible Security is then
exercisable, exchangeable or convertible). In the case of an Option to acquire a
Convertible Security, the Underlying Securities of such Option shall include the
Underlying Securities of such Convertible Security.
2. Restrictions on Dispositions of Covered Securities. No
Xxxxxx Stockholder shall Dispose of any Xxxxxx Holdco Shares, except in an
Exempt Transfer or a Charitable Transfer. No TCITP Stockholder shall Dispose of
any TCITP Holdco Shares, except in an Exempt Transfer. Any purported Disposition
of Covered Securities in violation of this Agreement shall be null and void and
of no force or effect, and, if Holdco has actual knowledge of such violation,
Holdco shall (and shall direct each registrar and transfer agent, if any, for
the Covered Securities to) refuse to register or record any such purported
Disposition on its transfer and registration books and records or to otherwise
recognize such purported Disposition. Subject to Section 4, if any Involuntary
Event affecting any Stockholder shall occur, such Stockholder's legal
representatives, heirs, successors or transferees, as the case may be, and all
Covered Securities beneficially owned by them shall be bound by all the terms
and provisions of this Agreement. The Xxxxxx Stockholders shall, and shall cause
each Related Party of Xxxxxx to, comply with the provisions of this Agreement
intended to be applicable to the Xxxxxx Stockholders or any Xxxxxx Holdco
Shares. The TCITP Stockholders shall, and shall cause each Related Party of
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each TCITP Stockholder to, comply with the provisions of this Agreement intended
to be applicable to the TCITP Stockholders or any TCITP Holdco Shares.
3. Right of First Refusal:
3.1 If any Stockholder (the "Selling Stockholder") desires to
accept an offer (other than with respect to a Public Sale or a Fast-Track Sale,
consistent with the definitions thereof, or a tender or exchange offer to which
Section 3.4 is applicable) (a "Bona Fide Offer") from a Person which is not a
Related Party of such Selling Stockholder (the "Prospective Purchaser") to
purchase any or all of the Covered Securities beneficially owned by such Selling
Stockholder (the "Subject Shares"), such Selling Stockholder shall, in
accordance with the following procedures, terms and conditions, first offer to
sell the Subject Shares to the Other Stockholder for consideration (subject to
subsections (g) and (h) of this Section 3.1) and on terms no more favorable to
the Selling Stockholder than those which would apply if the Selling Stockholder
accepted the Bona Fide Offer:
(a) The Selling Stockholder shall deliver to the
Other Stockholder a written notice (the "Offer Notice", which term shall include
any Offer Notice delivered pursuant to Section 3.2(a)) which shall (i) state the
number of shares or other appropriate unit of Covered Securities of each class,
series or other type that comprise the Subject Shares; (ii) identify the
Prospective Purchaser; and (iii) state the aggregate purchase price to be paid
by the Prospective Purchaser for the Subject Shares (the "Purchase Price") and
the kind and amount of consideration proposed to be paid or delivered by the
Prospective Purchaser for the Subject Shares of each class, series or other type
and the amount thereof allocable to each
22
share or other appropriate unit of the Subject Shares of that class, series or
other type (the "Per-Share Offer Consideration" for the Covered Securities of
that class, series or other type), the timing and manner of the payment or other
delivery thereof and any other material terms of such Bona Fide Offer. The
Selling Stockholder shall deliver a copy of the Offer Notice to Holdco at the
same time it is delivered to the Other Stockholder.
(b) The Offer Notice shall be accompanied by a
true and complete copy of the Bona Fide Offer.
(c) If an Offer Notice is given by a Selling
Stockholder, the Other Stockholder shall have the right (the "Purchase Right"),
exercisable in the manner hereinafter provided, to require the Selling
Stockholder to sell to the Other Stockholder the number or other amount of the
Subject Shares determined in accordance with this Section 3.1(c). If there is no
Defensive Provision or Requirement of Law in effect at the time any Offer Notice
is given that imposes any Restriction on the Other Stockholder (or that would
impose a Restriction if the Other Stockholder were to exercise the Purchase
Right as to all the Subject Shares), the Other Stockholder may exercise the
Purchase Right only as to all, but not less than all of the Subject Shares. If
there are one or more Defensive Provisions or Requirements of Law in effect at
the time such Offer Notice is given that impose any Restriction on the Other
Stockholder (or that would impose such a Restriction if the Other Stockholder
were to exercise the Purchase Right as to all the Subject Shares), the Other
Stockholder may exercise the Purchase Right only as to a number of Subject
Shares that is greater than or equal to the Initial Trigger relating to the
Other Stockholder at such time and less than or equal to the Rights Plan Trigger
relating to the Other Stockholder at such time. For purposes of
23
this Section 3.1(c), the Initial Trigger and the Rights Plan Trigger will be
determined as provided in Section 3.1(d).
(d) Commencing not later than the second business
day after an Offer Notice is given if there are one or more Defensive Provisions
in effect at such time, the Selling Stockholder and the Other Stockholder shall
consult with each other and Holdco in an effort to agree with respect to the
Initial Trigger and the Rights Plan Trigger, and upon request Holdco will
provide the Stockholders with information relating thereto pursuant to Section
3.5. If agreement is not reached by the Selling Stockholder and the Other
Stockholder on or prior to the fifth business day after the Offer Notice was
given, then, within two business days after such fifth business day, the Selling
Stockholder and the Other Stockholder shall jointly designate an independent law
firm of recognized national standing, which firm will be directed to submit a
written report regarding its conclusions as to the Initial Trigger and the
Rights Plan Trigger within 5 business days (which report shall include, if
requested, such law firm's conclusion as to whether any specified event under a
Rights Plan constitutes a Rights Plan Triggering Event). The number of Subject
Shares as to which the Other Stockholder may exercise the Purchase Right shall
be determined as follows:
(i) upon such law firm rendering a written report
within such 5 business day period as to the Initial Trigger
and the Rights Plan Trigger, if the Other Stockholder elects
to exercise its Purchase Right, the Other Stockholder may
exercise such Purchase Right only as to a number of Subject
Shares equal to or greater than the Initial Trigger and less
than or equal to the Rights Plan Trigger, as such amounts
shall be specified in such report; and
24
(ii) if such law firm does not render a written report
as to the Initial Trigger and the Rights Plan Trigger within
such 5 business day period, if the Other Stockholder elects to
exercise its Purchase Right, the Other Stockholder may
exercise such Purchase Right only as to a number of Subject
Shares equal to or greater than the Initial Trigger and less
than or equal to the Rights Plan Trigger, as determined by
such Other Stockholder.
If any law firm is so retained, Holdco, the Other Stockholder and the Selling
Stockholder shall provide such law firm with such information as may be
reasonably requested in connection with the preparation of such report and shall
otherwise cooperate with each other and such law firm with the goal of allowing
such law firm to render such report as promptly as reasonably practicable. Each
of Holdco, the Other Stockholder and the Selling Stockholder shall be
responsible for the payment of one-third of the fees and disbursements of such
law firm, except that if, at the time such law firm is retained, Holdco waives
its right to purchase any Subject Shares covered by the current Offer Notice,
Holdco shall not be responsible for any such fees and disbursements, which shall
in such case be borne equally by the Selling Stockholder and the Other
Stockholder. If the Selling Stockholder and the Other Stockholder are unable to
agree upon the selection of an independent law firm within the two business day
period provided for in this Section 3.1(d), either such Stockholder may apply to
the American Arbitration Association (or another nationally-recognized
organization that provides alternative dispute resolution services) to appoint
an independent law firm to prepare and submit the report provided for in this
Section 3.1(d), and any law firm so appointed shall constitute the law firm
contemplated by this Section 3.1(d). Anything contained herein to the contrary
notwithstanding, no
25
determination relating to the Initial Trigger, the Rights Plan Trigger or any
Rights Plan Triggering Event pursuant to this Section 3.1(d) shall be binding
upon Holdco in the absence of a written instrument signed by Holdco agreeing to
such determination (it being understood that Holdco has no obligation to provide
the Stockholders with any such written instrument).
(e) If the Other Stockholder desires to exercise
the Purchase Right with respect to any Subject Shares covered by any Offer
Notice, it shall do so by a written notice (an "Other Stockholder Exercise
Notice") delivered to the Selling Stockholder by the Other Stockholder prior to
5:00 P.M., New York City time, on the eighth business day following the receipt
of an Offer Notice or, if there is any dispute as to the Initial Trigger or the
Rights Plan Trigger, within 3 business days after the resolution of such
dispute. The Other Stockholder Exercise Notice shall state the aggregate number
or other appropriate amount of each class, series or other type of the Subject
Shares to be purchased (the "Other Stockholder Elected Shares"). A copy of the
Other Stockholder Exercise Notice shall be sent to Holdco at the same time it is
given to the Selling Stockholder. If an Other Stockholder Exercise Notice is
given within such period but, in accordance with Sections 3.1(c) and 3.1(d),
such Other Stockholder Exercise Notice specifies that only a portion of the
Subject Shares are elected to be purchased (a "Partial Exercise Notice), then
the Selling Stockholder shall have the right, exercisable by written notice to
each of the Other Stockholder and Holdco given within five business days after
the Partial Exercise Notice was given, to terminate the Offer Notice and abandon
the proposed sale pursuant to the Bona Fide Offer, in which case the provisions
of this Section 3.1 shall be reinstated with respect to any and all proposed
future Dispositions of the same or any Subject Shares pursuant to any subsequent
Bona Fide Offer by the same or any other Prospective Purchaser. If no
26
Other Stockholder Exercise Notice is delivered within the applicable number of
business days, or if an Other Stockholder Exercise Notice is delivered but the
number of Other Stockholder Elected Shares is less than the number of Covered
Securities that are the subject of such Offer Notice and the Selling Stockholder
does not exercise its right to terminate the Offer Notice and abandon the
proposed sale pursuant to the preceding sentence, Holdco shall have the right,
exercisable by a written notice (a "Holdco Exercise Notice") given to the
Selling Stockholder by Holdco prior to 5:00 P.M., New York City time, on the
second business day following the expiration of such period of 8 or 3 business
days, as the case may be, to elect to purchase all, but not less than all of the
Subject Shares which are not Other Stockholder Elected Shares, in accordance
with the procedures, terms and conditions set forth below in this Section 3.1
and for a consideration (subject to subsections (g) and (h) of this Section 3.1)
and on terms no more favorable to the Selling Stockholder than those which would
apply if the Selling Stockholder accepted the Bona Fide Offer with respect to
the Holdco Elected Shares. A copy of the Holdco Exercise Notice shall be sent to
the Other Stockholder at the same time it is given to the Selling Stockholder.
The Selling Stockholder shall have the right to condition the closing of the
sale of the Other Stockholder Elected Shares to the Other Stockholder upon the
closing of the sale of any Holdco Elected Shares and the closing of the sale of
any Holdco Elected Shares on the closing of the sale of the Other Stockholder
Elected Shares.
(f) If an Exercise Notice is given in accordance
with Section 3.1(e), within 5 business days thereafter the Purchaser and the
Selling Stockholder shall enter into a binding agreement (the "Sale Agreement")
for the sale of the Purchased Shares to the Purchaser, which agreement shall
contain such representations, warranties, covenants and conditions no less
27
favorable to the Selling Stockholder than the terms contemplated by the Bona
Fide Offer, except with respect to the kind and number or other amount of
Subject Shares to be purchased and the aggregate purchase price payable in the
event that the Purchased Shares constitute fewer than all the Subject Shares.
The Sale Agreement shall provide for the closing of the purchase and sale of the
Purchased Shares to be held at the offices of the Selling Stockholder at 11:00
a.m. local time on the 60th day after the Offer Notice was given (subject to
extension in accordance with Sections 3.1(i) and 5.1) or at such other place or
on such earlier date as the parties to the Sale Agreement may agree. At such
closing, the Purchaser shall (subject to subsections (e), (g) and (h) of this
Section 3.1) purchase the Purchased Shares for cash by wire transfer of
immediately available funds in an account at a bank designated by the Selling
Stockholder, such designation to be made no less than three days prior to
closing. At the closing, the Selling Stockholder shall deliver the certificates
and other evidences of the Purchased Shares to the Purchaser, against payment in
full for the Purchased Shares, free and clear of any pledge, claim, lien,
option, restriction, charge, shareholders' agreement, voting trust or other
encumbrance of any nature whatsoever to which the Purchased Shares are subject
in the hands of the Selling Stockholder other than restrictions on transfer
arising under federal and state securities laws and claims, restrictions,
options and encumbrances arising under this Agreement (an "Encumbrance").
Without limiting the generality of the immediately preceding sentence, if such
Purchased Shares are Other Stockholder Elected Shares and if the Other
Stockholder is TCITP, such Purchased Shares shall be free and clear of all
Encumbrances existing or arising under any Holdco Stockholders Agreement, and
Holdco shall release all such Encumbrances upon the closing of the purchase and
sale of such Purchased Shares pursuant hereto. The certificates evidencing the
Purchased Shares will be in proper
28
form for transfer, with appropriate stock powers executed in blank attached and
documentary or transfer tax stamps affixed. The Selling Stockholder shall
execute such other documents as shall be necessary to effectuate the sale of the
Purchased Shares and such additional documents as may be contemplated by the
Bona Fide Offer or as may reasonably be requested by any purchaser. The Other
Stockholder may assign any or all of its rights, and delegate any or all of its
obligations, under any Sale Agreement to which it is a party with respect to the
purchase and sale of any or all of the Other Stockholder Elected Shares to any
Controlled Affiliate of the Other Stockholder, provided that no such assignment
or delegation shall release the Other Stockholder from its obligations
thereunder without the written consent of the Selling Stockholder. Holdco may
assign any or all of its rights, and delegate any or all of its obligations,
under any Sale Agreement to which it is a party or otherwise with respect to the
purchase and sale of any or all of the Holdco Elected Shares to any Controlled
Affiliate of Holdco, provided that no such assignment or delegation shall
release Holdco from its obligations thereunder without the written consent of
the Selling Stockholder.
(g) Subject to Section 3.1(h), if the Bona Fide
Offer contemplated that the Purchase Price for the Subject Shares proposed to be
Disposed of by the Selling Stockholder would be paid, in whole or in part, other
than in cash, then the Purchaser shall pay for its Purchased Shares in cash in
lieu of such other consideration in an amount equal to the fair market value of
such other consideration as agreed by the Selling Stockholder and the Other
Stockholder. In the event of any disagreement between the Other Stockholder and
the Selling Stockholder as to the fair market value of any noncash consideration
payable to the Selling Stockholder, then at the request of either such party
given within 5 business days following the delivery of the Offer Notice
29
such determination shall be conclusively made by a panel of appraisers, one of
whom shall be selected by the Other Stockholder, the second of whom shall be
selected by the Selling Stockholder and the third of whom shall be selected by
the first two appraisers. The Other Stockholder and the Selling Stockholder
shall each designate their appraiser within 3 business days after receipt of any
request for appraisal, and such appraisers shall designate the third appraiser
within 3 business days thereafter. Each appraiser shall submit its determination
of the fair market value of such noncash consideration to the Other Stockholder,
Holdco and the Selling Stockholder within 5 business days after the panel is
empaneled and such fair market value shall be the average of the two closest
valuations (or the middle valuation, if the highest and lowest valuation differ
from the middle valuation by an equal amount). Each appraiser appointed shall be
a nationally recognized investment banking, appraisal or accounting firm which
is not directly or indirectly a Related Party of any party to this Agreement or
any Prospective Purchaser and which has no interest (other than the receipt of
customary fees) in the event giving rise to the need for the appraisal. Each of
the Other Stockholder and the Selling Stockholder shall be responsible for the
payment of one-half of the costs of such appraisal.
(h) If the Bona Fide Offer contemplated that any
part of the Purchase Price for any Subject Shares would be paid in debt
securities, each purchaser of any of such Subject Shares may, in its discretion,
elect to pay the equivalent portion of its allocable share of the Purchase Price
for the Purchased Shares through the issuance of debt securities with
substantially similar terms in an amount the fair market value of which is equal
to the fair market value of the equivalent portion of the debt securities
specified in the Bona Fide Offer, in each case as agreed by such purchaser and
the Selling Stockholder or, failing
30
such agreement, as determined in accordance with the appraisal procedures
specified in Section 3.1(g), taking into consideration relevant credit factors
relating to the Prospective Purchaser and such purchaser and the marketability
and liquidity of such debt securities.
(i) All time periods specified in subsection (e)
or (f) of this Section 3.1 shall be extended for a number of days equal to the
number of days in the period from the date the request for appraisal is made
pursuant to subsection (g) or (h) of this Section 3.1 or Section 4 (as the case
may be) through and including the date of submission of the last to be submitted
of the required appraisals. Each of the Other Stockholder, the Selling
Stockholder and Holdco shall be responsible for the payment of one-third of the
costs of each appraisal pursuant to subsection (h) of this Section 3.1
(including the fees of all appraisers appointed in accordance with subsection
(h) of this Section 3.1), except that, if, at the time such appraisal is
requested, Holdco waives its right to purchase any Subject Shares covered by the
current Offer Notice, Holdco shall not be responsible for any such fees and
disbursements, which shall in such case be borne equally by the Selling
Stockholder and the Other Stockholder.
(j) The Selling Stockholder shall have the right
to sell Subject Shares to the Prospective Purchaser only in the
following circumstances:
(i) If neither an Other Stockholder Exercise Notice nor a Holdco
Exercise Notice is given in accordance with Section 3.1(e) within the
applicable time period specified therein (as such period may be
extended pursuant to subsection (i) of this Section 3.1), the Selling
Stockholder shall have the right (within the period specified below in
31
this subsection) to sell all but not less than all of the Subject
Shares to the Prospective Purchaser, and in such case the "Free to Sell
Date" shall be the business day following the expiration of the last to
expire of all time periods provided for in Section 3.1(e).
(ii) If an Other Stockholder Exercise Notice is given but the
number of Other Stockholder Elected Shares is less than the number of
Covered Securities that are subject to the relevant Offer Notice, and
if no Holdco Exercise Notice is given in accordance with Section 3.1(e)
within the applicable time period specified therein (as such period may
be extended pursuant to subsection (i) of this Section 3.1), then the
Selling Stockholder shall have the right (within the period specified
below in this subsection) to sell all, but not less than all of the
Subject Shares which are not Other Stockholder Elected Shares to the
Prospective Purchaser, and in such case the "Free to Sell Date" shall
be the earlier of the fifth business day following the date the Other
Stockholder Exercise Notice was given and the date that Holdco notifies
the Selling Stockholder that it has determined not to purchase any such
Subject Shares.
(iii) If an Other Stockholder Exercise Notice is given but a Sale
Agreement for the Other Stockholder Elected Shares is not executed by
the Purchaser and tendered to the Selling Stockholder for execution
within the 5 business day period specified in the first sentence of
Section 3.1(f) (as such period may be extended pursuant to subsection
(i) of this Section 3.1), then the Selling Stockholder shall have the
right (within the period specified below in this subsection) to sell
all, but not less than all of the Subject Shares to the Prospective
Purchaser, and in such case the "Free to
32
Sell Date" shall be the business day after expiration of such 5
business day period.
(iv) If a Holdco Exercise Notice is given but a Sale Agreement
for the Holdco Elected Shares is not executed by the Purchaser and
tendered to the Selling Stockholder for execution within the 5 business
day period specified in the first sentence of Section 3.1(f) (as such
period may be extended pursuant to subsection (i) of this Section 3.1),
then the Selling Stockholder shall have the right (within the period
specified below in this subsection) to sell all, but not less than all
of the Holdco Elected Shares to the Prospective Purchaser, and in such
case the "Free to Sell Date" shall be the business day after the
expiration of such 5 business day period.
(v) If a Sale Agreement for either Other Stockholder Elected
Shares or Holdco Elected Shares is executed by the Purchaser and the
Selling Stockholder, but the closing of the purchase and sale
thereunder shall not occur by the latest date for such closing
determined in accordance with Sections 3.1(f), 3.1(i) and 5.1 for any
reason other than a breach or violation by the Selling Stockholder of
any of such Selling Stockholder's representations, warranties,
covenants or agreements that are a condition to such closing, then the
Selling Stockholder shall have the right (within the period specified
below in this subsection) to sell all, but not less than all of such
Other Stockholder Elected Shares or the Holdco Elected Shares covered
by such Sale Agreement to the Prospective Purchaser, and in such case
the "Free to Sell Date" shall be the business day after such latest
date for such closing as so determined.
33
(vi) If between the date an Other Stockholder Election Notice is
given with respect to any Other Stockholder Elected Shares and the
closing of the purchase and sale of such Other Stockholder Elected
Shares, there shall be any amendment or modification adverse to the
Other Stockholder of any Defensive Provision in effect on the date the
Other Stockholder Election Notice was given, adoption of any other
Defensive Provision adverse to the Other Stockholder, waiver adverse to
the Other Stockholder of any term or provision of or exercise adverse
to the Other Stockholder of any other discretionary right or power
under any Defensive Provision (whether then or thereafter in effect),
any reorganization, transfer of assets, consolidation, merger, share
exchange, dissolution, issue or sale of securities or any other action
or event which in the opinion of the Other Stockholder would, if such
purchase and sale were consummated, have a Disadvantageous Result, then
notwithstanding any other provision of this Agreement or any provision
of any Sale Agreement to which any member of the Other Stockholder
Group may be a party and without any liability or obligation to the
Selling Stockholder, Holdco, any other party to this Agreement or any
Prospective Purchaser, the Other Stockholder may, by written notice
given to the Selling Stockholder and Holdco within five business days
after the Other Stockholder acquires actual knowledge of such action or
event, rescind the Other Stockholder Election Notice and any Sale
Agreement to which any member of the Other Stockholder Group may be a
party and abandon the purchase and sale of the Other Stockholder
Elected Shares pursuant thereto. In such event, the Selling Stockholder
shall have the right to sell all or any portion of the Subject Shares
to the Prospective Purchaser and the "Free to Sell Date" shall be the
business day following receipt by the Selling Stockholder of such
written notice of abandonment.
34
Any sale of Subject Shares to the Prospective Purchaser permitted by this
Section shall be for the Purchase Price (or a greater price), payable in the
manner specified in the Bona Fide Offer, and otherwise on terms and conditions
no more favorable to the Prospective Purchaser than those contained in the Bona
Fide Offer; provided, however, that if such Subject Shares constitute fewer than
all the Subject Shares, the purchase price therefor shall be equal to or greater
than the portion of the Purchase Price allocable to such Subject Shares
(determined by multiplying each share or other appropriate unit of such Subject
Shares of each class, series or other type by the Per-Share Offer Consideration
for the Subject Shares of that class, series or other type). In the event that
(i) the Prospective Purchaser has not entered into a binding agreement with the
Selling Stockholder for the purchase of such Subject Shares within the 30-day
period following the Free to Sell Date or (ii) the Prospective Purchaser has not
purchased such Subject Shares within the time period which would be applicable
to a purchase thereof by a Purchaser under the second sentence of Section 3.1(f)
as if calculated from the Free to Sell Date (except that the 60-day period
referred to therein shall be construed as a 120-day period for this purpose),
then, in either such case, the Selling Stockholder's right to sell Subject
Shares to the Prospective Purchaser pursuant to this Section 3.1(j) shall expire
and the provisions of this Section 3.1 shall be reinstated with respect to any
and all proposed future Dispositions of the same or any other Subject Shares
pursuant to any subsequent Bona Fide Offer by the same or any other Prospective
Purchaser.
3.2 Public Sales.
(a) If any Stockholder at any time intends to
effect a Public Sale of Covered Securities (other than a
Fast-Track Sale), such Stockholder may deliver to the Other
35
Stockholder an Offer Notice pursuant to Section 3.1 offering to sell such
Covered Securities to the Other Stockholder at a price equal to the aggregate
Current Market Price thereof on the date on which such Offer Notice is given. A
copy of such Offer Notice shall be sent to Holdco at the same time it is given
to the Other Stockholder. If any such Offer Notice with respect to any Covered
Securities is given, the Stockholder giving the Offer Notice shall have all
rights and obligations of a "Selling Stockholder" under Section 3.1 and each of
the Other Stockholder and Holdco shall have all of their respective rights and
obligations provided for in Section 3.1, in each case with the same effect as if
such Covered Securities were "Subject Shares" proposed to be sold by the Selling
Stockholder to a Prospective Purchaser for "Per-Share Offer Consideration"
consisting of cash in an amount equal to the Current Market Price of the Covered
Securities on the date such Offer Notice is given and for a "Purchase Price"
equal to the total Current Market Price on such date of all such Subject Shares,
and as if the other terms of the Public Sale were the terms of the "Bona Fide
Offer" made by such assumed Prospective Purchaser, except that subsections (g),
(h) and (i) of Section 3.1 shall not apply and the provisions of subsection (j)
of Section 3.1 shall apply only as modified by subsection (b) of this Section
3.2.
(b) Subject Shares covered by any Offer Notice
given pursuant to this Section 3.2 may be sold (after full compliance with this
Section 3.2 and the applicable provisions of Section 3.1) by the Selling
Stockholder at any available price in a Public Sale of the type described in
such Offer Notice, provided that such sale or sales are completed within the
period of 120 days after the applicable Free to Sell Date; provided, however,
that if the issuer of any Covered Securities exercises any right to delay the
filing or effectiveness of a registration statement relating to such Covered
Securities or to suspend sales
36
under such registration statement, then the period shall be extended by the
number of days in any such delay or suspension period. If any Subject Shares
covered by such Offer Notice which such Selling Stockholder becomes obligated
under this Section 3.2 to sell to one or more purchasers or their permitted
assignees are not, for any reason, sold to such Persons within any applicable
period determined pursuant to Section 3.1, or if any such Subject Shares which
such Selling Stockholder is entitled, pursuant to the first sentence of this
Section 3.2(b), to sell in the Public Sale are not so sold within the period
provided in such sentence, then in each case the right of such Selling
Stockholder to sell such unsold Subject Shares shall terminate and such Subject
Shares shall thereafter continue to be subject to the restriction on
Dispositions of Covered Securities contained in Section 2.
3.3 Fast-Track Sales.
(a) Any Stockholder who proposes to make a
Fast-Track Sale may deliver to each of the Other Stockholder and Holdco a
written notice (the "Fast-Track Offer Notice") to such effect which states the
number of shares of Common Stock proposed to be sold (the "Fast-Track Shares").
The delivery of any such notice shall constitute the offer by such Stockholder
to sell to the Other Stockholder, Holdco or both all or such portion of the
Fast-Track Shares as it or they may have the right to purchase in accordance
with this Section 3.3 at a price payable in cash equal to the aggregate Current
Market Price thereof on the date on which such Fast-Track Offer Notice is given.
(b) The Other Stockholder shall have the right to
elect to purchase (or to designate any one or more of the members
of the Other Stockholder Group as purchasers of) all or any
number of the Fast-Track Shares. The Other Stockholder and
37
Holdco shall consult with each other in an effort to resolve any questions as to
the Initial Trigger and the Rights Plan Trigger; provided, that if the Other
Stockholder and Holdco cannot resolve such issue, then the Other Stockholder
shall have the right to purchase only the number of Fast-Track Shares that
Holdco shall specify. Anything contained herein to the contrary notwithstanding,
no determination relating to the Initial Trigger or the Rights Plan Trigger
pursuant to this Section 3.3(b) shall be binding upon Holdco in the absence of a
written instrument signed by Holdco agreeing to such determination (it being
understood that Holdco has no obligation to provide the Other Stockholder with
any such written instrument). If the Other Stockholder desires to exercise its
purchase right under this Section 3.3, it shall do so by a written notice
specifying the number of the Fast-Track Shares to be purchased and identifying
the purchasers thereof, given to the Stockholder who gave the Fast-Track Offer
Notice prior to 5:00 P.M., New York City time, on the third business day
following the receipt by the Other Stockholder of the Fast-Track Offer Notice
(provided that any Fast-Track Offer Notice received on a day that is not a
business day or after 12 noon, New York City time, on a business day, shall be
deemed to have been received on the next following business day). Holdco shall
have the right to elect to purchase any or all of the Fast-Track Shares that the
Other Stockholder does not elect to purchase or have one or more other members
of the Other Stockholder Group purchase in accordance with the immediately
preceding sentence, which right shall be exercisable by a written notice
specifying the number of such Fast-Track Shares to be purchased, which notice
shall be given by Holdco to the Stockholder proposing to sell such Fast-Track
Shares and the Other Stockholder prior to 5:00 P.M., New York City time, on the
fifth business day following the receipt by the Other Stockholder and Holdco of
the Fast-Track Offer Notice. If any such notice is given by either the Other
Stockholder or Holdco, the closing of
38
the purchase and sale of the Fast-Track Shares covered thereby shall be held at
the offices in the continental United States of the Other Stockholder or Holdco
(as the case may be) specified in such notice, 11:00 A.M., New York City time,
on the fourth business day after such notice was given or at such other place or
date as the Stockholder selling the Fast-Track Shares and the purchasers thereof
may agree, and such closing date shall not be subject to extension pursuant to
Section 5.1 or otherwise unless such selling Stockholder and such purchasers
agree to such extension. At such closing, the purchasers shall purchase such
Fast-Track Shares for cash by wire transfer of immediately available funds in an
account at a bank designated by the selling Stockholder, such designation to be
made no less than three business days prior to closing, against delivery at the
closing by the selling Stockholder of the certificates evidencing the Fast-Track
Shares to be sold to such purchasers, in proper form for transfer, with
appropriate stock powers executed in blank attached and documentary or transfer
tax stamps affixed. Such delivery of such certificates shall constitute the
representation and warranty of such selling Stockholder that upon such delivery,
such selling Stockholder duly transferred good and marketable title to the
shares evidenced thereby, clear of any Encumbrance. Without limiting the
generality of the immediately preceding sentence, if the Other Stockholder is
TCITP, such purchased Fast-Track Shares shall be free and clear of all
Encumbrances existing or arising under any Holdco Stockholders Agreement, and
Holdco shall release all such Encumbrances upon the closing of the purchase and
sale thereof. The purchase price payable for each Fast-Track Share purchased
pursuant to this Section 3.3 shall be the Current Market Price determined as of
the date the Fast-Track Offer Notice was given.
(c) Any Fast-Track Shares not purchased pursuant
to Section 3.3(b) may be sold by the selling Stockholder at any
39
available price in one or more Fast-Track Sales within the 90-day period
following the twelfth business day after the receipt by both Holdco and the
Other Stockholder of the Fast-Track Offer Notice, and if all Fast-Track Shares
for any reason are not sold within such period either pursuant to Section 3.3(b)
or in one or more Fast-Track Sales, then the right to sell such Fast-Track
Shares shall terminate and such Fast-Track Shares shall thereafter continue to
be subject to the restrictions on Dispositions of Covered Securities contained
in Section 2.
3.4 Tender or Exchange Offer Sales.
(a) If any Person shall make a tender or exchange
offer to acquire any Covered Securities, and if any Stockholder (a "Tendering
Stockholder") intends to tender any Covered Securities, such Tendering
Stockholder shall give the Other Stockholder written notice (the "Tender
Notice") of such intention not later than ten calendar days prior to the latest
time by which securities must be tendered in order to be accepted pursuant to
such offer as such date may from time to time be extended (the "Tender Date"),
specifying the Covered Securities proposed to be tendered (the "Tender Shares"),
together with copies of all written materials by which such offer is being made.
A copy of such Tender Notice shall be sent to Holdco at the same time it is
given to the Other Stockholder.
(b) Any Tender Notice given by any Tendering
Stockholder shall constitute an offer by such Tendering Stockholder to sell to
the Other Stockholder the Tender Shares. The Other Stockholder shall have the
right to elect to purchase (or to designate any one or more of the members of
the Other Stockholder Group as purchasers of) all or any number of the Tender
Shares in accordance with this Section 3.4. The Other Stockholder and Holdco
shall consult with each other in an effort
40
to resolve any questions as to the Initial Trigger and the Rights Plan Trigger,
but the rights of the Other Stockholder under this Section 3.4 shall not be
affected by the failure of Holdco to concur in any conclusion of the Other
Stockholder with respect to any such matter. Anything contained herein to the
contrary notwithstanding, no determination relating to the Initial Trigger or
the Rights Plan Trigger pursuant to this Section 3.4(b) shall be binding upon
Holdco in the absence of a written instrument signed by Holdco agreeing to such
determination (it being understood that Holdco has no obligation to provide the
Other Stockholder with any such written instrument). If the Other Stockholder
desires to exercise its purchase right under this Section 3.4, it shall do so by
a written notice specifying the number of the Tender Shares to be purchased and
identifying the purchasers thereof, given to the Tendering Stockholder at least
three business days prior to the Tender Date. If any such notice is given by the
Other Stockholder, the closing of the purchase and sale of the Tender Shares
covered thereby shall be held at the offices of the Other Stockholder within the
continental United States specified in such notice at 11:00 A.M., New York City
time, on a date specified in such notice that is not later than two business
days prior to the Tender Date, or at such other place or date as the Tendering
Stockholder and the Other Stockholder may agree, and such closing date shall not
be subject to extension pursuant to Section 5.1 or otherwise unless the
Tendering Stockholder and the Other Stockholder agree to such extension. At such
closing, the purchasers identified by the Other Stockholder shall purchase such
Tender Shares for cash by wire transfer of immediately available funds to an
account at a bank designated by the Tendering Stockholder in the Tender Notice,
against delivery at the closing by the Tendering Stockholder of the certificates
or other instruments evidencing the Tender Shares to be sold to such purchasers,
in proper form for transfer, with appropriate stock powers executed in blank
41
attached and documentary or transfer tax stamps affixed. Such delivery of such
certificates shall constitute the representation and warranty of such Tendering
Stockholder that upon such delivery, such Tendering Stockholder duly transferred
good and marketable title to the shares evidenced thereby, free and clear of any
Encumbrance. Without limiting the generality of the immediately preceding
sentence, such purchased Tender Shares shall be free and clear of all
Encumbrances existing or arising under any Holdco Stockholders Agreement, and
Holdco shall release all such Encumbrances upon the closing of the purchase and
sale thereof. The total purchase price to be paid by such purchasers for such
Tender Shares shall be (i) if such tender or exchange offer is consummated, the
purchase price that the Tendering Stockholder would have received if it had
tendered such Tender Shares and all such Tender Shares had been purchased in
such tender or exchange offer, including any increases in the price paid by the
offeror after exercise by the Other Stockholder of its right of first refusal
under this Section 3.4 or after the closing of the purchase of Tender Shares
pursuant to such exercise, (ii) if such tender or exchange offer is not
consummated, the highest price offered pursuant thereto, or (iii) if any other
tender or exchange offer is commenced prior to the expiration or termination of
such tender or exchange offer, the highest price offered in either such tender
or exchange offers in each case with any offered securities or other property
except cash to be valued as provided in Section 3.4(c).
(c) If the consideration offered in such tender
or exchange offer consists, in whole or in part, of securities or other property
except cash, then the purchasers identified by the Other Stockholder shall pay
for the Tender Shares cash in lieu of such other consideration in an amount
equal to the fair market value of such other consideration as agreed by the
Tendering Stockholder and the Other Stockholder. In the event the
42
Tendering Stockholder and the Other Stockholder do not agree as to the fair
market value of any such noncash consideration by the beginning of the second
business day after the Offer Notice is given, then such determination shall be
conclusively made by a panel of appraisers, one of whom shall be selected by the
Other Stockholder, the second of whom shall be selected by the Tendering
Stockholder and the third of whom shall be selected by the first two appraisers.
The Other Stockholder and the Tendering Stockholder shall each designate their
appraiser within three business days after such Offer Notice is given, and such
appraisers shall designate the third appraiser within three business days
thereafter. Each appraiser shall submit its determination of the fair market
value of such noncash consideration within three business days after the panel
is empaneled and such fair market value shall be the average of the two closest
valuations (or the middle valuation, if the highest and lowest valuation differ
from the middle valuation by an equal amount). Each appraiser appointed shall be
a nationally recognized investment banking, appraisal or accounting firm which
is not directly or indirectly a Related Party of any party to this Agreement or
the Person making the tender or exchange offer and which has no interest (other
than the receipt of customary fees) in the event giving rise to the need for the
appraisal. Each of the Other Stockholder and the Tendering Stockholder shall be
responsible for the payment of one-half of the costs of such appraisal.
(d) If the Other Stockholder does not exercise
its right of first refusal under this Section 3.4 by giving a notice of exercise
in accordance with Section 3.4(b) or, having given such notice, fails to
purchase and pay for (or have one or more of its designees purchase and pay for)
such Tender Shares on or prior to the business day prior to the Tender Date,
then the Tendering Stockholder shall be free to accept the tender or
43
exchange offer with respect to which the Tender Notice was given or any other
tender or exchange offer commenced during the pendency of the tender or exchange
offer with respect to which the Tender Notice was given.
3.5 Holdco to Provide Certain Information. If
requested at any time or from time to time by any Stockholder,
Holdco shall promptly provide to such Stockholder in writing
(i) all information which such Stockholder reasonably may request
for the purpose of determining whether, based on the facts set
forth by such Stockholder in such request, any acquisition of
beneficial ownership by such Stockholder or the Other Stockholder
would result in the occurrence of a Disadvantageous Result under
or in respect of any Defensive Provision and (ii) such other
non-confidential information known to Holdco as such Stockholder
may reasonably request regarding (A) the number of Covered
Securities issued and outstanding at any time, (B) the number of
Covered Securities owned of record by any person at any time, or
(C) the terms and conditions of any Defensive Provision.
3.6 Certain Actions by Holdco. In the event that Holdco shall
(i) amend or modify any Defensive Provision in effect on the date hereof, or
(ii) adopt any Defensive Provision after the date hereof, or (iii) purchase,
redeem or otherwise acquire any outstanding Covered Securities, directly or
indirectly through any Controlled Affiliate of Holdco, and the result of any
such action is to reduce the Initial Trigger or the Rights Plan Trigger with
respect to any Stockholder Group, then, in the case of any Offer Notice or
Tender Notice delivered after such action, if such action shall have had the
effect of reducing the number of Subject Shares covered by such Offer Notice
that may then be purchased by the Other Stockholder pursuant to this Agreement,
Holdco shall have no right under this Agreement to purchase any Subject Shares
covered by such Offer Notice.
44
4. Involuntary Event; Death or Incapacity.
4.1 In the event that (i) any Stockholder shall be adjudicated
bankrupt or insolvent or file a voluntary petition for bankruptcy (or an
involuntary petition for bankruptcy shall have been filed against any
Stockholder and the same shall not have been dismissed within 60 days after the
date of filing), or file a pleading in any court of record admitting his
inability to pay his debts as they become due, or make a general assignment for
the benefit of creditors, or (ii) a receiver, administrator, guardian, legal
committee or other legal custodian of any Stockholder's property shall be
appointed (other than in connection with his death or incapacity) and not
discharged within 60 days, or (iii) a writ of attachment or levy or other
similar court order shall prevent any Stockholder from exercising his or its
right to vote or Dispose of any of his or its Covered Securities and such writ
or levy is not dismissed (or such court order is not reversed) within 60 days,
then such Stockholder shall promptly notify the Other Stockholder of the
occurrence of any such event (the "Involuntary Event"). Simultaneously with the
delivery of any such notice required by this Section 4.1, such Stockholder shall
deliver an Offer Notice to such Other Stockholder pursuant to Section 3.1,
offering to sell all Covered Securities beneficially owned by such Stockholder
to such Other Stockholder at the Appraised Value. Each Stockholder giving such
an Offer Notice shall have, in respect of such Offer Notice, all rights and
obligations under Section 3.1 of a Selling Stockholder, except that if such
Stockholder is a Xxxxxx Stockholder, for so long as such Xxxxxx Stockholder is
subject to the restrictions on transfer contained in the Holdco Stockholders'
Agreement, it shall not be entitled to sell any Covered Securities to any Person
other than the Purchasers, if any; each Other Stockholder and Holdco shall have,
in respect of such Offer Notice, all rights and obligations under Section 3.1
45
which are provided for therein in the case of any Offer Notice given pursuant
thereto. For the purpose hereof, the term "Appraised Value" means the fair
market value of the Covered Securities to be sold as determined by appraisal in
the same manner as provided in Section 3.1(h) with respect to appraisals of
noncash consideration. Each of such Stockholder, the Other Stockholder and
Holdco shall be responsible for the payment of one-third of the costs of such
appraisal, except that, if, at the time such appraisal is requested, Holdco
waives its right to purchase any Subject Shares covered by the current Offer
Notice, Holdco shall not be responsible for any such fees and disbursements,
which shall in such case be borne equally by such Stockholder and the Other
Stockholder. All time periods specified in subsection (e) or (f) of Section 3.1
shall be extended for a number of days equal to the number of days in the period
from the delivery of the Offer Notice pursuant to this Section 4.1 through and
including the date of submission of the last to be submitted of the required
appraisals.
4.2 Any Sale Agreement entered into by any Stockholder and the
Purchaser pursuant to an Offer Notice required by Section 4.1 shall provide that
the closing of the sale of the Covered Securities to be sold and purchased
thereunder may be postponed for such period as may be necessary to effect the
purchase of such Covered Securities free from any claims of a trustee in
bankruptcy, any garnishee or any court order. In the event that any Covered
Securities subject to such Offer Notice are not purchased for any reason, such
Covered Securities shall continue to be subject to this Agreement.
4.3 In the event of Xxxxxx'x incapacity or death, his legal
representative or the executor or administrator of his estate, as the case may
be, shall be bound by all the terms and provisions of this Agreement as fully as
if such representative,
46
executor or administrator were a party hereto and his or its name were
substituted for Xxxxxx'x name herein and shall be entitled to exercise Xxxxxx'x
rights and required to perform his obligations hereunder.
5. Regulatory Approvals; Certain Representations,
Warranties and Covenants.
5.1 Regulatory Approvals. If any sale of Covered Securities to
any Stockholder, Holdco or any permitted assignee of any Stockholder or Holdco
in accordance with Section 3.1, 3.2 or 4 requires, as a condition to the legal
and valid transfer thereof to such Purchaser, any consent, approval, waiver, or
authorization of, notice to or filing with, any Governmental Authority or the
expiration of any waiting period imposed by applicable law and if Section 3.1,
3.2 or 4 (as the case may be) provides for the closing of such sale to be held
before some fixed or ascertainable date, then such date shall be extended for
the period of time during which efforts to obtain each such consent, approval,
waiver, or authorization, to give such notice or make such filing and to obtain
the termination of each such waiting period at the earliest reasonably
practicable time are diligently being made; provided, however, that in no event
shall the extension of any such closing date pursuant to this Section 5.1 exceed
90 days. Each party shall (and shall cause such party's Controlled Affiliates
to) reasonably cooperate with the other parties in obtaining any such consent,
approval, waiver, or authorization, to give any such notice or make any such
filing and in obtaining the termination of any such waiting period at the
earliest practicable time.
5.2 Representation and Warranty of Holdco. Holdco represents
and warrants to each of TCITP and Xxxxxx that, other than the Old TW Rights
Plan, the provisions of TW's Restated
47
Certificate of Incorporation and By-laws and the Delaware Statute, there were no
Defensive Provisions in effect on September 22, 1995; provided, however, that no
representation is made as to the laws of any jurisdiction other than Delaware.
6. Legend on Stock Certificates; No Recordation of Transfer.
6.1 Each certificate or instrument representing Covered
Securities directly or indirectly beneficially owned by any Stockholder shall
bear the following legend until such time as the shares represented thereby are
no longer subject to this Agreement:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF
OCTOBER 10, 1996, AMONG R.E. XXXXXX, III, TCI XXXXXX
PREFERRED, INC., XXXXXX PARTNERS, L.P., TIME WARNER INC. AND
CERTAIN OTHER PERSONS. A COPY OF SUCH AGREEMENT IS ON FILE
AT THE OFFICES OF TIME WARNER INC.
Holdco shall not be responsible for placing the above legend on any certificate
representing Covered Securities, except to the extent that it has actual
knowledge that such certificate has been issued in the name of any Stockholder.
6.2 Holdco agrees not to knowingly effect a transfer of any
Covered Securities which to Holdco's actual knowledge are directly or indirectly
beneficially owned by any Stockholder on its books except as permitted by the
terms of this Agreement. A copy of this Agreement shall be filed with the
Secretary of Holdco.
48
7. Representations and Warranties; Certain Additional
Covenants.
7.1 Certain Representations and Covenants of the TCITP
Stockholders. Each of the TCITP Stockholders represent and warrant to the Xxxxxx
Stockholders and Holdco as follows:
(a) Neither such TCITP Stockholder nor any of its
Controlled Affiliates that hold Holdco Shares is a party to or bound
by, any Contract, Requirement of Law or Judgment, other than
Requirements of Law referred to in Section 7.3(d), that does or may
prevent, impede or delay the due and punctual performance by any such
Person of its agreements, obligations and commitments contained in this
Agreement, and such TCITP Stockholder will not enter into or permit any
of its Controlled Affiliates to enter into any such Contract or take
any other voluntary action or voluntarily omit to take any action that
would have any such effect.
(b) Except for this Agreement and except for any
Permitted Pledge in effect as of the date hereof, there is no option,
warrant, right, call, proxy, or Contract that directly or indirectly
provides for the sale, pledge or other Disposition of any of such TCITP
Holdco Shares or any interest therein or any rights with respect
thereto, relates to the voting, Disposition or control of any thereof
or obligates or may obligate such TCITP Stockholder or any of its
Controlled Affiliates to grant, offer or enter into any of the
foregoing.
No breach or violation of any of the foregoing representations, warranties or
covenants shall result or be deemed to result directly or indirectly from or by
reason of any Contract between
49
TCITP and any of its Affiliates and Holdco and any of its Affiliates, directors
or officers, whether now existing or hereafter entered into, nor from or by
reason of the execution, delivery or performance of or action taken or omitted
to be taken pursuant to the terms of any such Contract or the consummation of
any transaction contemplated thereby, nor from or by reason of any option,
warrant, right, call, proxy or other right granted, covenant made or obligation
incurred under any such Contract that directly or indirectly provides for the
sale, pledge or other Disposition of any of the TCITP Holdco Shares or any
interest therein or any rights with respect thereto.
7.2 Certain Representations and Covenants of the
Xxxxxx Stockholders. Each of the Xxxxxx Stockholders represents
and warrants to the TCITP Stockholders and Holdco as follows:
(a) Neither such Xxxxxx Stockholder nor any of his or
its Controlled Affiliates that hold Holdco Shares is a party to or
bound by, any Contract, Requirement of Law or Judgment, other than any
Requirements of Law referred to in Section 7.3(d), that does or may
prevent, impede or delay the due and punctual performance by any such
Person of his or its agreements, obligations and commitments contained
in this Agreement, and such Xxxxxx Stockholder will not enter into or
permit any of his or its Controlled Affiliates to enter into any such
Contract or take any other voluntary action or voluntarily omit to take
any action that would have any such effect.
(b) Except for this Agreement and any Holdco
Stockholders Agreement and except for any Permitted Pledge in effect as
of the date hereof, there is no option, warrant, right, call, proxy, or
Contract that directly or indirectly provides for the sale, pledge or
other
50
Disposition of any of such Xxxxxx Holdco Shares or any interest therein
or any rights with respect thereto, relates to the voting, Disposition
or control of any thereof or obligates or may obligate such Xxxxxx
Stockholder or any of his or its Controlled Affiliates to grant, offer
or enter into any of the foregoing. Each of the Xxxxxx Stockholders has
delivered to TCITP a true and complete copy of each Holdco Stockholders
Agreement to which it is a party, if any, as amended through and in
effect on the date of this Agreement.
No Xxxxxx Stockholder shall permit the amendment of any Holdco Stockholders
Agreement to which it is a party in any manner that would have any effect
referred to in Section 7.2(a).
7.3 Representations and Warranties of Each Party. Each party,
severally and not jointly, represents and warrants to each of the other parties
as follows:
(a) If such party is a corporation or partnership,
such party has all requisite corporate power and authority or
partnership power and authority (as the case may be) to execute,
deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance by such party of, and the consummation of the
transactions contemplated by, this Agreement have been duly and validly
authorized by all necessary corporate action or partnership action (as
the case may be) on the part of such party.
(b) If such party is a natural person (whether acting
individually or in a fiduciary capacity), such party has full legal
capacity, right, power and authority to
51
execute, deliver and perform his or her obligations under this
Agreement and to consummate the transactions contemplated hereby.
(c) This Agreement has been duly executed and
delivered by such party. This Agreement constitutes a legal, valid and
binding obligation of such party enforceable in accordance with its
terms, except that (i) such enforceability may be subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (ii) such enforceability may be subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(d) The execution, delivery and performance of this
Agreement by such party do not, either with or without the giving of
notice or the passage of time or both, (i) assuming compliance with the
requirements referred to in clause (ii) of this sentence, violate or
conflict with any Requirement of Law or Judgment applicable to such
party, (ii) except for (A) requirements, if any, arising out of any
required pre-merger notification and related filings with the FTC and
the Antitrust Division of the Department of Justice pursuant to the
Xxxx-Xxxxx- Xxxxxx Antitrust Improvements Act of 1976, as amended, (B)
requirements, if any, arising out of the rules and regulations adopted
by the Federal Communications Commission, and (C) requirements, if any,
arising out of the FTC Consent Decree, require the consent or
authorization of or waiver by or filing with any Governmental Authority
or (iii) conflict with, result in the breach of any provision of,
result in the modification or termination of, require the consent or
authorization of or
52
waiver by or filing with any other parties to, or result in the
creation or imposition of any Encumbrance pursuant to, or constitute a
default under, any material agreement, permit, indenture, note, lease,
license or franchise or any other material instrument to which such
party is a party or by which such party's properties or assets are
bound or from which such party derives benefit. For purposes of this
Section 7.3(d), the word "party" includes (i) in the case of Holdco,
Holdco and its Affiliates, and (ii) in the case of any Xxxxxx
Stockholder, such Xxxxxx Stockholder and his or its Related Parties.
8. No Assignment.
This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns and, in the event of the incapacity or death of any Xxxxxx Stockholder
who is a natural person, his legal representatives, the executor or
administrator of his estate, and his heirs and beneficiaries, as provided in
Section 4 hereof. Except as specifically provided herein, this Agreement and the
rights and obligations of the parties hereunder may not be assigned or
delegated, in whole or in part. Without prejudice to the rights of Holdco under
any other provision of this Agreement, none of the provisions of Section 2
(other than the third sentence of Section 2) of this Agreement are intended to
be for the benefit of or enforceable by Holdco, and Holdco shall not have any
right, remedy or claim against any Stockholder by reason of any breach or
violation thereof.
9. Specific Performance. The parties hereto
acknowledge that the benefits to them under this Agreement are
unique, that they are willing to enter into this Agreement only
upon performance by each other of all of their obligations
53
hereunder and that monetary damage would not afford adequate remedy for failure
to perform any such obligations hereunder. Accordingly, the parties hereby
consent to specific performance of their obligations hereunder and waive any
requirement for securing or posting of any bond in connection with the obtaining
of any injunctive or other equitable relief to enforce their rights hereunder.
10. Termination, Amendment and Waiver. This Agreement shall
terminate as to all parties on the first to occur of (i) the date on which no
TCITP Stockholder beneficially owns any Covered Securities (otherwise than by
reason of any Disposition made in violation of this Agreement), (ii) the date on
which no Xxxxxx Stockholder beneficially owns any Covered Securities (otherwise
than by reason of any Disposition made in violation of this Agreement) and (iii)
any date of termination agreed to by TCITP and Xxxxxx. If, by reason of one or
more Dispositions, the number of Holdco Shares directly or indirectly
beneficially owned by the TCITP Stockholders, as a group, or the Xxxxxx
Stockholders, as a group, is less than one-third of the number of the shares
beneficially owned by such Group immediately after the Effective Time (which
number, in the case of the TCITP Stockholders, shall be calculated after giving
effect to the exchange required by Section 4.1 of the LMC Agreement and, as to
each Group, shall be appropriately adjusted to take into account any stock
split, reverse stock split, reclassification, recapitalization, conversion,
reorganization, merger or other change in such Holdco Shares) then such group
shall no longer have any right of first refusal under Section 3 or Section 4,
but shall continue to be subject to all obligations and restrictions arising
under this Agreement with respect to all Covered Securities which the members of
that group continue to beneficially own. This Agreement may be amended by the
parties hereto only by an instrument in writing signed by each party;
54
provided, however, that execution of any such amendment by or on behalf of
Holdco shall not be required unless such amendment adversely affects the rights
or obligations of Holdco hereunder. Any term or provisions of this Agreement may
be waived in writing at any time by the party which is entitled to the benefits
thereof.
11. General Provisions
11.1 All periods of time referred to in this Agreement (other
than references to business days ) shall include all Saturdays, Sundays or State
of New York holidays provided that if the date or last date to perform the act
or give any notice with respect to this Agreement shall fall on a Saturday,
Sunday or State of New York holiday, such act or notice may be timely performed
or given if performed or given on the next succeeding day which is not a
Saturday, Sunday or State of New York holiday.
11.2 All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be deemed
effectively given or delivered upon confirmed facsimile transmission, personal
delivery or the day following delivery to a courier service which guarantees
overnight delivery of such notice or five (5) days after deposit with the U.S.
Post Office, by registered or certified mail, return receipt requested, postage
prepaid, and, in the case of courier or mail delivery, addressed to the intended
recipient at his or its address as shown on Schedule I attached hereto or such
other address as a party may specify in writing.
11.3 This Agreement constitutes the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, whether oral or written, relating to the
subject matter hereof (it being
55
understood that this Section 11.3 is not intended to obviate the respective
rights and obligations of Xxxxxx, Holdco and the other parties thereto under the
Investors Agreement (No. 1) dated as of the same date as this Agreement among
Holdco, Xxxxxx, XXX and TP).
11.4 Any provision hereof which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
11.5 The headings of the articles and sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation of
this Agreement. The definitions in Section 1 and elsewhere in this Agreement
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The words "herein", "hereof" and "hereunder" and words of similar import refer
to this Agreement in its entirety and not to any part hereof unless the context
shall otherwise require. All references herein to Sections, Exhibits and
Schedules shall be deemed references to and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. Unless
otherwise expressly provided herein or unless the context shall otherwise
require, any references as of any time to the "Certificate of Incorporation",
"Restated Certification of Incorporation", "Articles of Incorporation",
"charter",
56
"organizational or governing documents" or "By-laws" of any Entity, to any
agreement (including this Agreement) or other Contract, instrument or document
or to any statute or regulation or any specific section or other provision
thereof are to it as amended and supplemented through such time (and, in the
case of a statute or regulation or specific section or other provision thereof,
to any successor of such statute, regulation, section or other provision).
Unless otherwise expressly provided herein or unless the context shall otherwise
require, any provision of this Agreement using a defined term (by way of example
and without limitation, such as "Controlled Affiliate") which is based on a
specified characteristic, qualification, feature, relationship or status shall,
as of any time, refer only to such Persons who have the specified
characteristic, qualification, feature, relationship or status as of that
particular time.
11.6 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but which together shall
constitute but one and the same instrument.
11.7 This Agreement and the validity, interpretation and
performance of the terms and provisions hereof shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the provisions thereof relating to choice or conflict of laws, except to the
extent that the laws of the jurisdiction of incorporation of Holdco shall be
mandatorily applicable.
11.8 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL
COURT SITTING IN NEW YORK CITY (AND OF ANY APPELLATE COURT TO WHICH AN APPEAL OF
ANY JUDGMENT, ORDER, DECREE OR DECISION OF ANY SUCH COURT MAY BE
57
TAKEN) IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH
SUIT, ACTION OR PROCEEDING, (II) WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY SUCH COURT, INCLUDING ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM AND (III) WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING.
58
IN WITNESS WHEREOF, the parties have executed this
Stockholders' Agreement in two or more counterparts as of the day and year first
above written.
TCI XXXXXX PREFERRED, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
LIBERTY BROADCASTING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
COMMUNICATION CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
/s/ R. E. Xxxxxx
---------------------------------
R.E. XXXXXX, III
XXXXXX OUTDOOR, INC.
By: /s/ R.E. Xxxxxx
---------------------------------
Name:
Title:
XXXXXX PARTNERS, L.P.
By: /s/ R. E. Xxxxxx
---------------------------------
Name: R.E. Xxxxxx, III
Title: General Partner
59
TW INC. (which promptly following
the date hereof is changing its name
to Time Warner Inc.)
By: /s/ Xxxxxx X. XxXxxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Vice President
